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2 percent tax cap misnomer creates confusion


Public school districts are scrambling this spring to combat a misconception some voters may have: that a new state law caps tax-levy increases at 2 percent with no exceptions.

While most north country school district budgets are staying below a 2 percent levy increase, some districts, including Copenhagen Central School District, are allowed more than a 6 percent increase. Potsdam Central, on the other hand, is over the limit with a 2.9 percent increase.

Residents vote Tuesday on 2012-13 school budgets.

With exemptions in the maximum allowable increase for such items as pension costs, court ordered expenditures and payment-in-lieu-of-taxes received the previous year, the levy limit becomes as unique as a fingerprint for each district.

For school districts, exceeding the levy limit means a super majority — 60 percent of votes plus one — is required to pass the budget. If the budget does not pass, the board has a second opportunity to present it. If it does not pass again, the district is forced into contingency.

Most districts are not faced with Potsdam’s problem.

“I think people were nervous,” said Copenhagen Central School District Superintendent Scott N. Connell. “Out on the street, people really think it’s a 2 percent limit.”

Copenhagen’s Board of Education approved a 2.9 percent tax levy increase but has a maximum allowable limit of 6.3 percent. Only Potsdam needs a super majority vote.

“For the past year, we have been spreading the word through every medium we can,” Mr. Connell said. “We are very careful to use the words ‘tax levy threshold’ rather than ‘tax cap,’ because that’s what it is.”

He said the district had more questions from the public before the 2011-12 budget vote. He attributes the lack of questions this year to the newsletters and pamphlets sent out throughout the school year.

Not all school districts have gotten off as easily. Harrisville Central Superintendent Rolf A. Waters said a resident at a meeting Tuesday accused the district of going over the levy limit by 0.9 percentage points. The board approved a 2.97 levy increase but had a maximum limit of 6.42 percent.

“Confusion? Yeah. There’s a lot of it, too,” he said. “I’ve spent a lot of time trying to explain that 2 percent is not the tax levy limit.”

The maximum allowable limit is based on an eight-step formula involving the prior year’s levy and payment-in-lieu-of-taxes deals approved in the past year as well as those expected the following year. Exclusions include capital tax levy, what is needed to pay additional pension costs and court-ordered and judgment expenditures if they exceed 5 percent of the total taxes levied the prior year.

“With all the talk of New York’s ‘2 percent tax cap,’ it may come as a surprise to learn that each school district in the state will present three separate tax levy numbers this spring as a part of their compliance with the new legislation,” according to a newsletter developed by the Capital Region Board of Cooperative Educational Services. “And chances are good that none of your school district’s three levy numbers will be exactly 2 percent.”

In the north country, many districts, including General Brown, Beaver River, South Lewis and Canton, are raising their tax levies by more than 2 percent but are below the limit.

“I’m not sure why it’s referred to as a 2 percent cap,” said Mr. Waters. “In this case, I don’t know where any of us can make a reasonable assumption for it. It doesn’t make sense.”

Times staff writer Steve Virkler and Johnson Newspapers writers Benny Fairchild and Susan Mende contributed to this report.

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